Boston's Poor Pay More For FoodTheft and Other Problems Increase Business Costs, Prices

Massachusetts NewsBy John Pike

August 2--Standing outside a small
supermarket near his home in Roxbury, black resident Mohamed Hosein, of
Intervale Street, told Massachusetts News, "There needs to be a
better supermarket in this community."

Hosein says he shops at grocers in the black community only because they
are close, but when he has time he prefers to shop at Star Market near
Fenway Park or Cambridge's Porter Square. "In Cambridge and the Fenway, the
prices are lower and the store is cleaner."

Lillian Tyler of Kensington Park, Roxbury, who is black and only shops in
Roxbury because it is within walking distance, says the overall quality in
Roxbury markets is poor. "I prefer to shop at Stop & Shop in the South Bay
shopping center or Star Market in the Prudential Center because the
employees will wait on you better, where they are not talking to each
other."

Except for the very edges of the black community, not a single
large-chain supermarket operates in Roxbury, Mattapan, or North Dorchester.
In recent years, when large chains have opened stores in very poor
neighborhoods, the high amount of theft has caused the stores to lose money
and be forced to close, such as the Star Market on Morton Street which lost
millions and the Stop & Shop on Columbia Road.

Michael Hunter, a real estate manager for Supervalue supermarkets, which
is involved with local grocers under various names, says the average
household income surrounding a grocery store is the determining factor for
the profitability of a market.

Hunter says a large chain could not operate in the Grove Hall area of
Roxbury because the $15,000 average household income of the neighborhood
would result in difficulties, such as security and employee-labor skills.

Missing Fathers Hurt the Children

Donald Marion, a former University of Massachusetts professor and food
marketing economist told Massachusetts News the primary reason the
black community does not have high-quality, low-priced supermarkets similar
to those in the white suburbs has to do with issues of labor. "Since the
cultural history of work and career employment in poor black neighborhoods
is less common, some, but not all, of the workers do not know what is
expected of them when they take a job." Absenteeism is more common, and
there can be problems with punctuality and dependability.

Frank Miller, who managed the Morton Street Star Market in Mattapan in
the 1970s, told Massachusetts News a high-turnover rate was a
problem, and could be attributed to a lack of role models in the home with
work experience.

One of his best workers called in sick for work, instead of telling his
boss he was going to be late, when he was forced to take a bus after his car
broke down. Miller had to explain to him that it was better for him to come
in late, than not at all.

Supermarkets in the black community must obtain most of their employees
from the immediate neighborhood because a majority of their customers would
want and expect that, he says.

Theft is Damaging

Since supermarkets typically operate with Lilliputian profit margins of
between one and two percent, even in affluent communities, employee
pilferage and stealing in poor black neighborhoods causes many grocers to go
out of business, he says.

Shrinkage, which is the amount of product that is lost due to stealing or
damage, is typically between one-half and three-fourths of one percent in
suburban areas, says Marion. The inner-city shrinkage rate is between one
and one-half and two percent, sometimes reaching four percent.

An Ames department store in Boston's black community that closed a few
years ago reported a shrinkage rate of 10 percent.

Miller and Archie Williams, the erstwhile owners of now defunct Freedom
Foods located in Roxbury and Dorchester, both said stealing was one factor
that contributed to the downfall of their respective stores.

Two high-level large-chain supermarket executives who refused to be
identified, and who have been intimately involved in stores in poor black
areas, both said stealing is the most important reason supermarkets lose
money in poor black areas.

Williams said he had to sell $3,000 worth of food to cover the cost of
each shopping cart stolen.

Grocery stores in black communities engage security guards to hamper
shoplifting, provide overall protection, and give a feeling of security for
its customers, most of whom are women. This added expense can be crucial to
a store that, under the best of conditions, already has low-profit margins.

Adding to the extra labor costs of inner-city stores, Marion says, is
that the stores tend to become more disheveled, with items scattered
indiscriminately throughout, which must be re-shelved. This occurs because
shoppers have less money, so when they reach the cash register, they
discover they cannot afford some items. Since the stores also tend to have
more children in them, the kids add to the scattering of items.

Marion says large chains with suburban stores are unable to increase
their prices in inner-city stores to offset its higher expenses because
neighborhood residents, most of whom are poor, would strongly object. "There
would be pressure against charging more. There is something not quite right
charging people with the least ability to pay more money."

As a result, Marion says, small independent grocers, who specifically do
not have stores in the suburbs that charge less, are able to charge more
because they do not have any other stores to compare their prices to. The
only grocers in Boston's black neighborhoods are relatively small
independent ones that tend to charge more.

Despite the city of Boston putting in $6.8 million to help develop the
soon to open Grove Hall shopping area, only a small independent grocer is
willing to open a store there.

Independent Stores Know Their Customers

Another advantage independents have in inner-city locations is their
ability to better serve the specific needs of the neighborhood, says Marion.
Independents come from the neighborhood, know the area better, and work hard
to develop a relationship with the residents.

Mark Sutherland, of Harrishof Street, Roxbury, says he prefers to shop in
West Roxbury because of the higher quality and lower prices, but when he
occasionally seeks to purchase Jamaican foods from his parents' homeland, he
can only find those products in his own neighborhood.

Markets in black areas sell products hardly ever seen in white suburban
stores, such as neck bones, salt pork, several kinds of smoked meat, ham
hocks, and king fish because inner-city residents are often descendents of
Caribbean, African, Latin American, or Asian countries.

Miller says Star Market food buyers sometimes did not have a good
understanding of particular foods eaten in black areas, so they had
difficulty purchasing the items in an efficient manner. Since Star bought
food for a chain of about 60 stores, it was not a priority for them to make
sure one store in the inner-city had its supply of Caribbean foods.

Since chain supermarkets often prefer stores with about 55,000 square
feet, and available city land is sometimes scarce, it is often easier to
open a store in the suburbs, which adds to the scarcity of markets in the
inner-city, says Marion. The costs of occupancy can be higher, along with
extra red tape, although these problems are sometimes less severe in ghetto
areas.

Driving along Blue Hill Avenue, the commercial heart of Boston's black
community, one is easily struck by the paucity of retail stores. Up until
the 1960s, when the area was predominantly Jewish, it had a vibrant economy.
But since then Blue Hill Avenue's economic activity has plummeted to the
point where there are few supermarkets, department stores, restaurants,
music stores, taverns or even poorly-paid taxi drivers willing to stop for
an extra customer. Getting a flat tire fixed is easy, but finding a mechanic
to repair a carburetor is another story, as mechanics are almost
nonexistent.

The unfortunate result is that Boston's poorest citizens must pay higher
prices for lower-quality food to the few local grocers, or travel great
distances outside their community, often without access to a car, to find a
decent supermarket. It also means that local employment, retail jobs that
are often a stepping stone to more meaningful careers, are few and far
between, which contributes to high unemployment in the black community.